Fund to cash out of Boston offices

Real Estate Alert, April 21, 2004

A value-added-fund operator is offering an office building in downtown Boston that it acquired 16 months ago.

The 270,000-square-foot building, located at 116 Huntington Avenue in the Back Bay submarket, is valued at about $85 million, or $315/sf. At that price, the buyer's initial annual yield would be about 8%.

A vehicle operated by New Boston Fund bought the property in December 2002 for $68 million from local investment group ATC Realty. At the time, the occupancy rate was about 90%, with rents averaging $50/sf. Since then, the fund operator has increased the occupancy level to 95%, while boosting rents. It also extended the lease of lead tenant IDX Systems.

The 15-story building, considered a local landmark, is one of 19 Class-A properties in the Back Bay area. The property, which was built in 1990, is located between Prudential Center and Copley Place, and offers direct access to the Massachusetts Turnpike.

Trammell Crow's Boston office, which handled the sale to New Boston just over a year ago, has the listing.